Hedge funds trimmed their bullish bets on agricultural
commodities for a second successive week as they ended a long-running spree of
positive positioning on sugar, and as concerns over the delayed start to US corn
sowings waned.

Managed money, a proxy for speculators, reduced its net long
position in futures and options in the top 13 US-traded agricultural
commodities, from cotton to cattle, by more than 20,000 contracts in the week
to last Tuesday, according to data from the Commodity Futures Trading
Commission regulator.

The decline represented a further retreat in the net long, after
the previous week witnessed an end to the longest run of bullish positioning by
hedge funds on ags on records beginning in 2006.

And speculators remained in profit-taking mode on many contracts
– signally, as sentiment in shares has begun reviving, and with many brokers
commenting on swings in money flows between the two markets.

US equity markets last week enjoyed their best weekly
performance in nine months.

Corn sowings
prospects

However, the less upbeat feel was particularly evident in
Chicago corn futures and options, in which hedge funds cut their net long
position by nearly 20,000 contracts, the biggest selldown since October.

The change in positioning came amid reduced jitters over the
US spring sowings season, with fieldwork delayed by low temperatures and, in
some areas, excessive rainfall too.

Although US Department of Agriculture data underlined the
slow start, showing just 3% planted as of last Sunday, half the normal rate by
then, weather forecasts began to show warmer weather ahead, reducing concerns.

A broadly reduced willingness to buy corn at prices much
over $5.00 a bushel was also highlighted by the weak response by prices to,
apparently bullish, US Department of Agriculture forecast revisions on April 9.

Indeed, many brokers have questioned USDA estimates for Chinese
corn imports in 2013-14.

Wheat retreat

Hedge funds also reduced their net long position in wheat
futures and options in both Chicago, which trades soft red winter wheat, and
Kansas City hard red winter wheat, despite fresh concerns over the Ukraine
crisis kicking in on April 14.

Speculators' net longs in New York softs, Apr 15, (change on week)

Raw sugar: 117,638, (-6,448)

Cocoa: 63,818, (-4,176)

Cotton: 53,266, (-6,404)

Arabica coffee: 38,143, (+751)

Sources: Agrimoney.com, CFTC

Wheat futures have proved a barometer of the political
unrest in Ukraine, a major exporter of the grain.

And, in New York, speculators cut their net long position in
raw sugar by more than 6,000 contracts, ending a runoff increasingly bullish
bets which had lasted unbroken for two months.

The extent of the buying raised doubts over hedge funds'
appetite for more such positions, with Sucden Financial warning last week that the
net long was "nearing the uppermost level of speculative longs in recent months"

Cattle cash market

Also in New York, hedge funds maintained a retreat in
positive positioning on cotton, with concerns over Chinese demand and soft
polyester prices undermining sentiment in the fibre, in which Australia &
New Zealand Bank issued a "sell" recommendation.

Speculators' net longs in Chicago livestock, Apr 15, (change on week)

Live cattle: 135,039, (-1,166)

Lean hogs: 72,253, (+1,598)

Feeder cattle: 15,937, (+695)

Sources: Agrimoney.com, CFTC

Back in Chicago, speculators also proved less bullish in
live cattle futures and options for a second successive week, after raising
their net long position to the highest since 2010 at the start of the month.

There were signs over the week of some topping in the cash
market, with Texas and Kansas prices down $1 per hundredweight to $147 in Texas
and Kansas week on week, with talk of higher slaughter numbers too.